What Is Retail Point Of Sale Software?

15 August 2022 in Sales & CRM

Making sales is the primary goal of any retail business. In a physical store, a point of sale (POS) system is the technology used to complete a sale. This can be a simple software application or a complex integrated system that includes inventory management, customer relationship management (CRM), and accounting.

Essentially, POS software is an operating system allowing physical stores to manage their in-person sales. It’s a multifaceted tool that can do much more than just payment processing. The right retail POS system will save time, improve accuracy, streamline business processes, and provide valuable insights into your business. Without this technology, processing transactions and managing inventory would be challenging for any modern business.

In this article, we’ll answer the question “what is retail point of sale software?” in more depth while also discussing how and why businesses use it.

Why Do Businesses Need a POS Solution?

Before the widespread use of computer systems, businesses had to perform manual tasks to keep track of inventory and sales. This often meant using a pen and paper and keeping notes of what was sold in a physical ledger. Not only was this process time-consuming, but it was also prone to human error.

With the introduction of the cash register in the late 1800s, it was possible to record sales transactions automatically. This was a major step forward for businesses, but the technology was still quite limited.

The modern retail POS system has come a long way since early cash registers. They can now track inventory in real-time, provide insights into customer behaviour, process contactless card payments and much more.

This technology has allowed retail businesses to operate with far more efficiency, which is an essential competitive advantage in today’s fast-paced market where brick-and-mortar stores have to compete with online retailers. Without a point of sale (POS) software solution, it would be difficult for businesses to provide the customer experience that modern consumers expect.

The point-of-sale system is not the only aspect of retail that has gone digital. From customer management to accounting and inventory tracking, the entire retail landscape has undergone a digital transformation over the past few decades. POS software can now seamlessly integrate with other software solutions, allowing businesses to unify their data and get a complete view of their operations.

For example, your retail POS software can be integrated with an inventory management system to update stock levels after each sale is processed automatically. This ensures that businesses always have an accurate view of their inventory, which is essential for managing stock levels and avoiding stockouts. You can also integrate retail POS systems with CRM software to track customer data and purchasing behaviour. This information can be used to improve customer retention, create targeted marketing campaigns, and boost overall sales.

POS solutions are a near-indispensable part of running a retail business in the 21st century. The right POS system is far more than just an integrated payment processing solution — it can directly facilitate the growth of your business.

Who Uses Point of Sale Systems?

Any business with a physical location selling products or services face-to-face can benefit from using POS software. This includes physical stores, restaurants, cafes, bars, hotels, and more. Many POS systems have been designed with certain industries in mind, including features and integrations tailored to that sector’s needs. Here are some examples of how specific businesses use point of sale (POS) software.


Standard retail stores are what most people think of when they hear the term “POS system”. Supermarkets, clothing shops, electronic stores, and other similar businesses use retail POS technology to process sales quickly and efficiently.

The POS terminal is one of their most essential pieces of equipment, as it allows them to track and manage inventory, store data and process payments. On top of these more advanced software integrations, retail POS software is usually integrated with a receipt printer, barcode scanner, and cash drawer.


Restaurant POS systems are nearly universal in the hospitality industry. Specialised restaurant POS software can allow servers to track orders according to their table number, send the order directly to the kitchen, and automatically calculate the bill.

This technology can significantly improve the efficiency of a restaurant’s operations, which is especially important in fast-casual restaurants where customers expect to be in and out within a short period of time.


Hotels need to track a wide range of information, from room reservations and customer data to payments and staff hours. A hotel point of sale system is a crucial piece of technology that helps hotel staff manage and integrate all this information with other essential hotel management applications.

Hotel POS systems are often integrated with property management software, which allows hoteliers to keep track of all their guest data in one place. These systems can be used in unison to track room bookings, process payments, and manage staff rotas.

Hair & Beauty Salons

Hair and beauty salons need to track appointments, manage stock levels, and process payments — all while providing their customers with a high level of service.

A specialised POS solution can help salon owners do all this and more. These systems often include features such as appointment booking and customer management, which can help salons keep on top of their operations and not miss a beat.

POS Software Vs POS Hardware

Your “point of sale” is the location in your store where customers make purchases and pay for their goods or services. A traditional POS would have just been a physical counter with a cash register, but these days it can be a mobile device that your sales staff use to process payments on the go.

The “POS software” is the operating system that you use to process sales and track your business data. This software will usually run on some kind of hardware, which is the physical device that the software is installed on.

For example, you might have a retail store that uses a desktop computer as its point of sale hardware. The POS software would be installed on this computer, and it would be used to process sales, track inventory, store data, and more.

Let’s take a look at some of the most common types of POS equipment and hardware.

POS Terminals

A POS terminal is a stand-alone device that is designed for processing sales. These terminals are typically used in retail environments and can be integrated with a wide range of POS software applications. POS terminals usually include a built-in receipt printer, barcode scanner, and cash drawer. Most modern models also come with features such as a customer display screen and a contactless payment reader.

Desktop Computers

Desktop computers are often used as POS hardware, especially in retail environments. This is because they offer a wide range of features and flexibility when it comes to POS software integrations. Many retail POS software applications are designed to run on desktop computers and can be integrated with various peripherals.


Tablets are becoming an increasingly popular type of POS hardware, especially in hospitality and retail environments. This is because they offer a high level of mobility, which can be beneficial for businesses that need to process sales on the go. Many POS vendors now design their software to run on tablets, providing greater versatility and flexibility for businesses of all types.

Card Readers

A credit card reader is a hardware device that is used to read the information from a credit or debit card. These devices are often used in conjunction with POS software to process sales. The credit card reader either connects to the POS via a USB or a wireless Internet connection, and it can also be used to process contactless payments.

Receipt Printers

A receipt printer is a hardware device that is used to print receipts for customers. Receipt printers usually connect directly to your point of sale hardware, and they can be used to print receipts for customer purchases, including sales, returns, and exchanges.

Barcode Scanners

A barcode scanner is a hardware device that is used to read the information from a barcode. The barcode tells the scanner what product the customer is trying to purchase, and the scanner then looks up the price of the product in the POS software. They can read anything related to your store with a barcode, such as gift cards, customer loyalty programs, and receipts. Barcode scanners will usually integrate with your inventory management system so that you can keep track of your stock levels in real-time.

Cash Drawers

A cash drawer is a hardware device that is used to store cash. Most stores have a daily float, which is a set amount of cash that is used to serve customers. The cash drawer is typically located under the POS terminal, and it can be opened by the POS software when a sale is processed. This means it’s essential for your POS software to have effective security features in place to prevent unauthorised access to the drawer.

Customer Displays

A customer display is a hardware device that is used to display information to customers. These displays are usually located near the POS terminal, and they can be used to display information such as the total cost of a purchase, the items in a customer’s shopping basket, or the current in-store specials. They enhance the customer experience by providing relevant information about their purchase.

Touchscreen Monitors

Touchscreen monitors have become commonplace in POS systems, as they offer a high level of interactivity and user-friendliness for retail staff and cashiers. Touchscreen monitors can be used to display the POS software interface and process sales in an efficient manner.

What is a Cloud-based POS System?

Most POS systems can be divided into two categories: cloud-based and on-premise. Before Internet access and cloud solutions became widely available, retail POS systems were typically on-premise, meaning they were installed and operated directly from the POS hardware equipment.

Nowadays, however, many businesses are opting for cloud-based POS systems. A cloud-based POS system is a solution that is hosted on remote servers and can be accessed using the Internet. This type of system offers several advantages for businesses, including the ability to access the system from multiple locations, automatic software updates, and enhanced security.

Cloud-based POS systems are often provided as “software as a service”, which is a type of subscription that allows businesses to access the software on a monthly payment (or annual) basis. This type of pricing model can be more flexible and cost-effective for companies as it doesn’t require a large upfront investment. It also means the business owner is not responsible for the maintenance and upkeep of the software, as the POS software provider handles this. If the software goes down, the service provider will be responsible for fixing the issue.

Most cloud-based POS applications also come with mobile apps that can be used to process sales on a mobile device, such as a smartphone or tablet. Mobile POS systems are ideal for businesses that need to take their POS solution on the go, such as businesses that operate pop-up shops or mobile market stalls.

The main disadvantage of cloud-based POS systems is that they require an Internet connection to function. This means they may not be suitable for businesses that are located in areas with poor or unreliable Internet access.

What Can a Retail POS System Do?

POS systems do a lot of work behind the scenes. There’s more to them than just the processing of sales and transactions. Modern POS systems come with a range of key features and functionalities that can streamline all aspects of your retail store. Here are some of the things a retail POS system can do.

Payment processing

Although cash payments are still common in retail stores, there is now a far wider range of payment types that need to be processed. Credit and debit cards are the most common, but businesses also need to be able to accept gift cards, store credits, mobile POS payments, and more. Contactless credit card processing is also becoming commonplace, as it offers a quick and easy way to process transactions without needing customers to enter their pins.

Monitor Sales

If you’re processing hundreds of sales per day, it would be impossible to keep track of all the data without a POS system. It’s crucial that this information is recorded for loss prevention, bookkeeping, and auditing purposes. A POS system can provide you with real-time sales data to see which products were sold, during which time of the day, and in which location.

Assist Inventory Management

If you’re running a retail business, chances are you have a lot of inventory to keep track of. A POS system can help you manage your inventory by tracking stock levels, issuing low stock alerts, and generating reports showing you which products are selling and which aren’t.

Sales Reporting

POS systems can also generate sales reports that provide insights into your business’s performance. These reports can be used to track sales data over time, identify slow-selling products, and monitor employee performance. It can calculate each employee’s average transaction value, your store’s total daily sales, and more. This can highlight which employees might need additional training and which products might need to be discounted or removed from your shelves.

When combined with footfall data, you can calculate your store’s total conversion rate and average basket size. If you have multiple store locations, your POS system can help you manage them all from one central location, so you can see how each store is performing and compare sales data side-by-side.

Combine Both Instore and Online Sales Reporting

Many brick-and-mortar retail operations also have a digital presence, whether it’s a simple website or a full-fledged online store. Retail POS software can help you manage both your online and offline sales from one central location. This data can then be used to generate comprehensive sales reports that give you a complete overview of your business performance.

Manage Customer Relationships

While your POS system might also integrate directly with your CRM system, it can also provide some basic CRM features that can help you track customer satisfaction and loyalty. For example, your POS system can allow you to attach sales to particular customers, record their contact details, and send virtual receipts via email. This information could be used to follow up with customers post-purchase or send personalised marketing based on their in-store purchase history.

Employee Management

It’s crucial that only authorised staff members have access to your POS system and can only perform the actions they’re supposed to. To help with this, most POS systems will allow you to create individual staff accounts. These accounts can be customised to give different employees access to different features, and you can also set limits on things like the value of transactions they can process.

These employee management features can help to prevent fraud and data breaches. If your business has a commission structure, you can also use your POS system to track employee sales figures and calculate commissions and bonuses.

How to Choose a New POS System

If you feel like it’s time for a new POS system, you might find it helpful to start narrowing down the most essential features. You can talk to the people who will be using the system on a daily basis to get their input, and you can also consult other business owners who work in a similar industry.

Once you’ve got a good idea of the key features that you need, you can start looking at some of the more popular retail POS systems and comparing them side-by-side. If you’re talking directly to a POS vendor, here are some key questions that you can ask.

How easy is the system to use?

The “user experience” is a big factor in POS systems, as you don’t want your employees struggling with a complex system that lacks an intuitive interface. Not only will this potentially affect their productivity, but it also means that you will have to invest more time and effort into training them on how to use the system. Many vendors will offer demonstrations of their software, so try to take advantage of this to get a feel for how easy it is to use.

Can it be customised to suit my business’s needs?

No two businesses are the same, so ensuring that your POS system can be customised to suit your particular operation is useful. Many POS systems come with a range of built-in features, but you might also need some specific functions that are unique to your business.

For example, if you run a restaurant, you will need a POS system that can handle table management, reservations, online ordering and menu customisation. If you frequently take payments over the phone, then you will need a system that can process these types of transactions without the card being physically present as well.

What kind of support is offered?

Whenever you’re investing in new software, it’s essential to ensure you have access to good technical support in case anything goes wrong. Some POS vendors will charge you extra for technical support, while others will include it as part of your monthly subscription.

In either case, make sure you find out what kind of support is offered and what the average response time is. Also endeavour to find out if there is any training available for new users, as this can be extremely helpful to getting everyone up to speed with the new system.

How much does it cost?

One of the chief factors to consider is the cost of the POS system. There is a wide range of price points, so it’s good to make sure that you’re getting a system offering good value for money.

In addition to the initial purchase price or monthly subscription fee, you should also find out if there are any additional costs for things such as custom features, tech support, or training. Once you’ve got a few quotes, you can start to compare the different systems to see which one offers the best value for your business.

Is there a free trial period?

Some vendors will offer a free trial period for their software, which can help you test the system before committing to a purchase. This can be an easy way to see if the system is a good fit for your business while also allowing you to get a feel for how intuitive it is to use.

What kind of hardware is required?

When you’re looking at POS systems, it’s critical to find out what kind of hardware is required and how much it will cost. You might already have some of the hardware you need, such as a computer or tablet, but certain systems will require proprietary hardware.

For example, many mobile POS system vendors will offer a specific type of mobile hardware that is only compatible with that particular system. Sometimes, you may also need to purchase extra hardware such as scanners or receipt printers.

Can the system grow with my business?

As your business grows, you might need to add additional features to your POS system. That’s why it’s necessary to find out if the system you’re considering can be easily expanded to accommodate your future needs.

For example, if you’re planning on opening additional locations, you’ll need a system that can be used in multiple sites. Alternatively, if you’re planning on adding an e-commerce component to your business, you’ll need an all-in-one solution to integrate with your online store.

Will it integrate with my existing software?

If you’re already using other software for your business, you’ll need to ensure that your POS system can integrate with these existing programs. For example, you might want to integrate your POS system with your accounting software so that sales data can be automatically transferred for bookkeeping purposes.

Alternatively, you might want to integrate your POS system with your customer relationship management (CRM) software so that you can keep track of your customers’ purchase histories. In a different scenario, you may also wish to connect your physical POS to your online store so that inventory levels can be automatically updated across your business.

These are just some of the questions that would be useful to ask each POS provider, but ultimately the decision comes down to what’s best for your business.

POS Software – A Must for Any Retail Business

Retail POS software is a critical component of any brick-and-mortar retailer. It’s not so much a question of “do I need it?” but more “which one is right for me?”. There are many different types of POS software on the market, and the features and functionality can vary considerably from one system to the next.

But if you take the time to do your research and ask the right questions before diving into a purchase, you should be able to find a POS system that ticks all the right boxes.

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